SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MARCH 24, 2000
THE MNI GROUP INC.
10 WEST FOREST AVENUE, ENGLEWOOD, NEW JERSEY 07631
(201) 569-1188
INCORPORATED UNDER THE LAWS OF COMMISSION FILE NUMBER
STATE OF NEW JERSEY 0-18349
I.R.S. EMPLOYER IDENTIFICATION NUMBER
22-2380325
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ITEM 5. OTHER EVENTS.
Effective March 24, 2000, Marianne J. Legato, M.D., agreed to become
Chairperson of the Medical Advisory Board of womenshealthnetwork.com, an
Internet website developed by The MNI Group Inc. ("MNI" or the "Company"), and
to serve as the principal medical spokesperson for the Company. Dr. Legato is a
Professor of Clinical Medicine at Columbia University College of Physicians and
Surgeons and the founder and Director of the Partnership for Women's Health at
Columbia University. womenshealthnetwork.com is a website devoted to providing
comprehensive information on 70 health conditions that have particular
importance to women.
Pursuant to her consulting agreement with the Company, Dr. Legato will
be paid $250,000 over the three year term of the agreement. In addition, the
Company granted Dr. Legato and her assignee options to purchase a total of
3,985,000 shares of common stock of the Company at an exercise price of $0.875
per share, which was the last bid price of the common stock on the Nasdaq OTC
Bulletin Board on March 24, 2000. The options have a term of five years and
vested 20% upon grant, with an additional 20% vesting on each six month
anniversary of the date of grant (with accelerated vesting in the event of a
sale of the Company), subject to Dr. Legato's continued performance under the
consulting agreement during the vesting period with respect to the unvested
portion of the options, except as provided in the consulting agreement. The
Company has agreed to register the shares underlying the options granted to Dr.
Legato under the Securities Act of 1933, as amended, on a Form S-8 Registration
Statement. Pursuant to Dr. Legato's consulting agreement with the Company,
options to purchase an additional 515,000 shares of common stock of the Company,
on substantially the same terms as Dr. Legato's options, were granted to the
Department of Medicine at Columbia University College of Physicians and Surgeons
and to certain persons who will assist Dr. Legato in the performance of her
duties under the consulting agreement.
Dr. Legato has agreed that, during the term of her consulting
agreement, she will not serve in either an advisory or consultative capacity to
another company's website which is engaged in providing women's health
information or become an officer or director of a company engaged principally in
providing women's healthcare information over the Internet. The consulting
agreement does not preclude Dr. Legato from (i) continuing to serve as an
advisor to Dr. Koop.Com or continuing to act in her capacity at the Columbia
Partnership for Women's Health or any other future website affiliated or
associated with Columbia University or any of its affiliates or (ii) appearing
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as an occasional guest speaker or other participant in chat rooms, seminars or
any other programs that are to be delivered over the Internet.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
EXHIBIT 10.1 - Consulting Services Agreement, dated March 24, 2000,
by and between the MNI Group Inc. and Marianne J. Legato, M.D.
EXHIBIT 10.2 - Non-Qualified Stock Option Agreement, dated March
24, 2000, between The MNI Group Inc. and Marianne J. Legato.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE MNI GROUP INC.
By: /S/ ARNOLD GANS
-------------------
Arnold Gans
President
Date: March 28, 2000
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CONSULTING SERVICES AGREEMENT
THIS AGREEMENT FOR THE PROVISION OF CONSULTING SERVICES is made and
entered into as of March 24, 2000 by and between the MNI Group Inc. (the
"Company"), a New Jersey corporation, and Marianne J. Legato, M.D.
("Consultant"), an independent consultant.
WHEREAS, the Company has developed an Internet website called
womenshealthnetwork.com ("WHN"), which will provide dynamic healthcare content
primarily relating to women, including information on acute ailments, chronic
illnesses, nutrition, fitness and wellness, and access to medical databases,
publications and realtime medical news and will include facilities for
e-commerce transactions of healthcare-related products, principally the
Company's branded line of Fem Choice women's products; and
WHEREAS, Consultant is a Professor of Clinical Medicine at Columbia
University College of Physicians and Surgeons and the founder and Director of
the Partnership for Women's Health at Columbia University and possesses in-depth
knowledge in the areas of women's health; and
WHEREAS, the Company and Consultant are mutually desirous of
establishing an initial relationship pursuant to this Agreement, with the
intention of amplifying and expanding their relationship in the future; and
WHEREAS, until such time as their relationship may be so amplified, the
Company desires to obtain the services of Consultant as Chairperson of its
Medical Advisory Board and principal medical spokesperson as outlined herein;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, the Company and Consultant agree as follows:
1.0 SERVICES. Commencing as of the date hereof, Consultant shall become
Chairperson of the Medical Advisory Board ("CMAB") of WHN and the principal
medical spokesperson for the Company. In such capacities, and in addition to
such further services as shall be appropriate to Consultant's position as CMAB
of WHN and as the principal medical spokesperson for the Company, or as
otherwise agreed between the parties, Consultant shall have the following
duties:
a. Help define WHN's mission, consistent with her vision, which
is for WHN to become a world class site for gender-specific
medicine with a primary emphasis on women's health, and to
direct WHN's staff to accomplish this goal;
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b. Identify and recruit health care professionals (both MD's
and PhD's) with areas of expertise that will enhance the
quality and scope of the medical information provided on
WHN;
c. Become involved in the development of a Continuing Medical
Education ("CME") program under the auspices of WHN and
identify and recruit health care professionals (both MD's and
PhD's) with areas of expertise to act as presenters under that
program;
d. Identify new research and other medical developments
related to women's health that will enhance the respective
information included on WHN and enhance the purpose and
value thereof;
e. Participate periodically in chat room discussions, seminars
and investor meetings and presentations;
f. Personalize data on the Company's website by preparing
introductions for each of the major sections on WHN covering
fourteen (14) health sections covering seventy-three (73)
health topics and as the number of major sections expand,
preparing introductions for each of the subsequent sections;
and
g. Make public appearances on behalf of WHN and at other
speaking engagements (where appropriate) promote the WHN
site.
Consultant's duties pursuant to this Agreement shall not include any implicit or
explicit endorsement of any products.
2.0 COMPENSATION; TIME DEVOTED TO PROVISION OF SERVICES.
2.1 COST COMPENSATION. Consultant shall be entitled to and the Company
shall pay to Consultant for services rendered during the term of this Agreement
the sum of $250,000, of which $100,000 shall be paid upon the execution of this
Agreement and $150,000 shall be paid upon the first anniversary thereof.
2.2 EQUITY-BASED COMPENSATION. As additional compensation for services
rendered during the term of this Agreement, Consultant shall be granted options
to purchase a total of 3,985,000 shares of common stock of the Company. The
options shall be granted upon the execution of this Agreement at the then fair
market value thereof (the closing bid price on the date of grant), shall have a
term of five (5) years and shall vest 20% upon grant, with an additional 20%
vesting on each six (6) month anniversary of the date of grant (with accelerated
vesting in the event of a sale of the Company), subject to Consultant's
continued performance under this Agreement during the vesting period with
respect to the unvested portion of the options. The options shall have such
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further terms and conditions as are set forth in the Stock Option Agreement
annexed hereto as Exhibit A. The Company acknowledges and agrees that Consultant
shall be entitled to assign from the stock options granted to Consultant
pursuant to this Agreement 398,500 stock options to her agent, Richard Curtis.
In addition, the Company agrees to issue 15,000 stock options to members of
Consultant's office staff, who will be assisting Consultant in connection with
her performance of services under this Agreement, as follows: Christine Haider -
10,000 stock options and Polesta Fitzgerald - 5,000 stock options. All of the
stock options assigned to Richard Curtis or issued to members of Consultant's
office staff will be subject to all the terms and conditions set forth in this
Agreement applicable to the stock options granted to Consultant pursuant to this
Section 2.2. All such stock options shall be issued pursuant to Stock Option
Agreements substantially in the form annexed hereto as Exhibit B. In addition,
for a period of five (5) years following the date hereof, the sale of shares
issuable upon the exercise of options covered by this Section 2.2 shall be
subject to the volume restrictions applicable under Rule 144 of the Rules and
Regulations under the Securities Act of 1934, as amended. Within six (6) months
following the date hereof, the Company shall file a Registration Statement on
Form S-8 to register the common stock reserved for issuance under the options
granted to Consultant pursuant to this Section 2.2. The holders of all other
options granted pursuant to this Section 2.2 and Section 8.0 hereof shall be
afforded the opportunity (to the extent permitted by the underwriter, if any, of
the offering registered thereby) to register the resale of the shares underlying
such options in any Registration Statement filed by the Company under the
Securities Act of 1933, as amended, which permits such registration.
2.3 REIMBURSEMENT OF EXPENSES. the Company shall reimburse Consultant
for all reasonable travel expenses (including first class airfare and comparable
hotel accommodations) incurred by Consultant in connection with appearances made
by Consultant on behalf of the Company, consistent with the Company's standard
employee expense reimbursement policy and upon the presentation of appropriate
supporting documentation.
2.4 TIME DEVOTED TO PROVISION OF SERVICES. The parties acknowledge that
it is not their intention to establish a minimum amount of time that Consultant
shall be required to devote to her duties under this Agreement. At the same
time, Consultant acknowledges that the fulfillment of her duties under this
Agreement will require a meaningful devotion of her professional time to the
affairs of the Company, for which she is receiving substantial compensation,
including a significant equity interest in the Company. Notwithstanding the
foregoing, Consultant will not be required (i) to limit or otherwise restrict
her current professional activities or (ii) to work for the Company more than
the maximum number of hours of outside work permitted by her contractual
arrangement with Columbia University or any Columbia University policy
applicable to Consultant. Consultant shall retain her professorship at Columbia
University and shall be free to join the faculty of any medical school (in
whatever capacity) as well as retain the right to conduct a private medical
practice.
However, during the term of this Agreement, Consultant agrees that she
will not in any manner act in either an advisory or consultative capacity to
another company's website engaged in providing women's health information or
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become an officer or director of a company engaged principally in providing
women's healthcare information over the Internet. This provision shall not
preclude Consultant from (i) continuing to serve as an advisor to Dr. Koop.Com
or continuing to act in her capacity at the Columbia Partnership for Women's
Health or any other future website affiliated or associated with Columbia
University or any of its affiliates or (ii) appearing as an occasional guest
speaker or other participant in chat rooms, seminars or any other programs that
are to be delivered over the Internet. With respect to other professional
opportunities which Consultant believes will not conflict with her duties under
this Agreement, upon request by Consultant, the Company will review such
opportunities and agrees to not unreasonably withhold its consent for
Consultant's pursuit thereof.
3.0 NATURE OF RELATIONSHIP.
3.1 INDEPENDENT CONTRACTOR STATUS. Consultant shall perform as an
independent contractor and not as an employee of the Company. Consultant will
not act as, and is not, an agent or employee of the Company for any purpose, and
shall not enter into or incur any obligation on behalf of the Company except as
provided herein.
3.2 BENEFITS AND TAXES. Except as provided herein, Consultant shall not
be entitled or eligible to participate in any benefits or privileges given or
extended by the Company to its employees. Consultant (and not the Company) shall
be responsible for and shall make all required payments of Federal and State
withholding taxes, FICA and FUTA payments, and such other tax liabilities as may
result from her entering into this Agreement.
4.0 INTENTIONALLY OMITTED.
5.0 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Consultant has entered
into a Letter Agreement dated even date herewith (the "Confidentiality
Agreement") with the Company pursuant to which Consultant has agreed not to
disclose and to keep confidential certain secret and confidential information of
the Company, all as is more fully set forth in the Confidentiality Agreement.
The terms of the Confidentiality Agreement are hereby incorporated herein and
made a part hereof.
6.0 TERM AND TERMINATION.
6.1 TERM. This Agreement shall, upon execution by both the Company and
Consultant, be deemed to be effective as of the date hereof and shall continue
in full force and effect for a period of three (3) years.
6.2 TERMINATION FOR CAUSE.
a. This Agreement may be terminated by the Company "for cause"
if Consultant is convicted of a felony, is suspended from the practice of
medicine in the State of New York, or acts in willful and gross dereliction of
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her duties under this Agreement. In addition, the Company shall have the right
to terminate this Agreement "for cause" in the event of a breach of Consultant's
warranty set forth in Section 9.1 hereof or in the event of Consultant's death
or disability. Consultant shall be deemed to be permanently disabled after three
(3) consecutive months during which she was unable to perform a minimum of 75%
of her regular full business day's agenda. Termination of this Agreement "for
cause" (other than by reason of Consultant's death) shall be made by delivery to
Consultant of a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the Company's directors at a meeting of the
Company's Board of Directors called and held for the purpose (after thirty (30)
days prior written notice to Consultant and reasonable opportunity for the
Consultant and her counsel to be heard prior to such vote), finding that in the
good faith business judgment of the Board, the Consultant was guilty of the
conduct or in breach of the warranty set forth above or had become permanently
disabled (as defined) and specifying the particulars thereof.
b. This Agreement may be terminated by Consultant "for cause" if
(i) the Company shall be in material breach of its obligations under this
Agreement and fails to correct such breach within three (3) days after receipt
of written notice thereof from Consultant or (ii) the Company removes Consultant
from or fails to reelect her to the position of Chairperson of its Medical
Advisory Board.
6.3 TERMINATION FOR CONVENIENCE. Either the Company or Consultant may
terminate this Agreement without cause by providing the other party with written
notice of not less than thirty (30) days.
7.0 EFFECTS OF TERMINATION.
7.1 TERMINATION BY THE COMPANY "FOR CAUSE" OR TERMINATION BY CONSULTANT
"FOR CONVENIENCE". In the event the Company shall terminate this Agreement "for
cause" or Consultant shall terminate this Agreement "for convenience",
Consultant shall not be entitled to receive any further cash compensation from
the Company pursuant to this Agreement and all options which are not vested as
of the date of termination shall terminate. In addition, in the event the
Company shall terminate this Agreement "for cause" (other than in the event of
Consultant's death or disability) or Consultant shall terminate this Agreement
"for convenience", Consultant shall refund to the Company the cash compensation
she received from the Company pursuant to this Agreement prior to the
termination thereof in excess of what her pro rata compensation would have been
had her cash and equity-based compensation been payable in equal monthly
installments over the entire three (3) year term of this Agreement.
7.2 TERMINATION BY THE COMPANY "FOR CONVENIENCE" OR TERMINATION BY
CONSULTANT "FOR CAUSE". In the event the Company shall terminate this Agreement
"for convenience" or Consultant shall terminate this Agreement "for cause",
Consultant shall be entitled to immediate payment of any further cash
compensation payable by the Company pursuant to this Agreement and all options
which are not then vested shall immediately vest.
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8.0 COLUMBIA UNIVERSITY. The parties acknowledge that Consultant is a
full professor of Clinical Medicine at Columbia University College of Physicians
and Surgeons and that Consultant's association with Columbia University enhances
Consultant's standing within the medical community thereby providing a benefit
to the Company through Consultant's rendering of services to the Company under
this Agreement. Accordingly, upon the execution of this Agreement, the Company
agrees to issue to the Department of Medicine at Columbia University College of
Physicians and Surgeons, options to purchase 500,000 shares of common stock of
the Company on and subject to all the terms and conditions set forth in this
Agreement applicable to the options to be granted to Consultant pursuant to
Section 2.2 hereof. Such stock options shall be granted to the Department of
Medicine and their disposition will be determined by Dr. Myron Weisfeldt, the
Chairman of the Department. Such stock options shall be issued pursuant to Stock
Option Agreement(s) substantially in the form annexed hereto as Exhibit B.
9.0 MISCELLANEOUS.
9.1 CAPACITY TO CONTRACT. Consultant warrants that she has the capacity
to enter into this Agreement, that her performance of services to the Company
pursuant to this Agreement is not restricted by and does not conflict with any
contractual obligations Consultant has to any other person or entity and that
the Chairman of the Department of Medicine at Columbia University College of
Physicians and Surgeons has reviewed this Agreement and has approved
Consultant's execution thereof.
9.2 ASSIGNMENT. This Agreement shall be binding on the parties and
their respective successors and permitted assigns. Except as provided in Section
2.2 hereof, neither party may assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other party, and
any such attempted assignment shall be void in the absence of such written
consent.
9.2 NOTICES. Any notices under this Agreement shall be in writing and
shall be hand-delivered or sent by Certified or Registered Mail to the party
receiving the notice at the address specified below:
If to the Company: The MNI Group Inc.
10 West Forest Avenue
Englewood, New Jersey 07631
Attention: Arnold M. Gans, President
If to Consultant: Marianne J. Legato, M.D.
200 East 66th Street, Apt. B 2103
New York, New York 10021
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with a copy to: Richard Curtis
19 East 88th Street, Apt. 5A
New York, New York 10128
9.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
between residents of that State and executed in and to be performed in that
State, without giving effect to principles of conflicts of law.
9.4 MODIFICATIONS. No modifications, amendments, supplements to or
waivers of this Agreement or any of its provisions shall be binding upon the
parties hereto unless made in writing and duly signed by both parties.
9.5 WAIVER. A failure by either party to exercise any right provided
for herein or by the applicable law shall not be deemed to be a waiver of any
right hereunder. The remedies provided herein shall be cumulative and shall not
be exclusive of any rights or remedies provided under law.
9.6 COMPLETE AGREEMENT. This Agreement, together with the
Confidentiality Agreement incorporated by reference herein, sets forth the
entire understanding of the parties as to the subject matter therein and may not
be modified except in writing executed by both parties.
9.7 SEVERABILITY. In the event that any one or more of the provisions
of this Agreement are invalid or otherwise unenforceable, the enforceability of
the remaining provisions shall be unimpaired. 9.8 HEADINGS. The headings used in
this Agreement and the organization of this Agreement are for convenience only
and shall not affect in any way the interpretation of this Agreement.
9.8 HEADINGS. The headings used in this Agreement and the organization
of this Agreement are for convenience only and shall not affect in any way the
interpretation of this agreement.
9.9 LEGAL FEES IN CONNECTION WITH THIS AGREEMENT. The Company agrees to
pay or reimburse Consultant for, at Consultant's discretion, attorneys' fees and
disbursements incurred by Consultant in connection with the negotiation,
execution and delivery of this Agreement, including the Confidentiality
Agreement and Stock Option Agreement, up to a maximum of $10,000.
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IN WITNESS THEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
THE MNI GROUP INC.
BY:___________________________
Arnold M. Gans, President
___________________________
Marianne J. Legato, M.D.
THE MNI GROUP INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of March 24, 2000 between The MNI Group Inc., a
New Jersey corporation (the "Corporation"), and Marianne J. Legato (the
"Optionee"), is entered into pursuant to and in accordance with the terms of a
Consulting Services Agreement dated even date herewith (the "Consulting
Agreement") between the Corporation and Optionee.
The Corporation, with the approval of its Board of Directors (the
"Board"), hereby grants to the Optionee as of the date hereof an option (the
"Option") to purchase all or any part of an aggregate of 3,586,500 shares of the
Corporation's common shares, $.01 par value per share (the "Common Stock"), at
$0.875 per share (the "Exercise Price") upon the following terms and conditions:
1. The Option and all rights of the Optionee to purchased shares of
Common Stock hereunder shall terminate on March 24, 2005 (hereinafter referred
to as the "Expiration Date").
2. Optionee's right and option to purchase shares of Common Stock
pursuant to the Option shall vest as follows:
March 24, 2000 717,300 shares
September 24, 2000 an additional 717,300 shares
March 24, 2001 an additional 717,300 shares
September 24, 2001 an additional 717,300 shares
March 24, 2002 an additional 717,300 shares
Notwithstanding the foregoing, the Option shall become fully vested in the event
of the sale of all or substantially all of the assets of the Corporation or a
majority of its outstanding stock.
3. Once the Option has vested in accordance with the preceding Section
2, it shall continue to be exercisable until the earlier of the termination of
Optionee's rights hereunder pursuant to Section 5 hereof, or the Expiration
Date. A partial exercise of the Option shall not affect Optionee's right to
exercise the Option with respect to the remaining shares subject thereto,
subject to the conditions of this Agreement. Full payment for shares acquired
shall be made in cash or in shares, or a combination of cash and shares, at or
prior to the time that an Option, or any part thereof, is exercised.
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4. (a) The Option shall not be affected by any change of duties or
position so long as the Optionee continues to be a consultant or an employee of
the Corporation or of a parent or subsidiary thereof (collectively hereinafter
referred to as the "Corporation").
(b) No partial exercise of the Option may be for less than 100
full shares (or less than all the shares as to which the Option is exercisable,
if less than 100 shares), and in no event shall the Corporation be required to
issue any fractional shares.
5. (a) In the event of the death or disability of Optionee or
Optionee shall terminate the Consulting Agreement or employment with the
Corporation "for convenience", all options which are not vested as of the date
of termination of the Consulting Agreement or employment shall terminate and all
vested options on such date shall be exercisable for a period of one (1) year
from the date thereof (but not later then the Expiration Date).
(b) In the event the Corporation shall terminate Optionee's
Consulting Agreement or employment "for cause" (other than in the event of the
death or disability of Consultant), all vested and unvested options shall
terminate as of the date of termination.
(c) In the event Optionee shall terminate the Consulting
Agreement or her employment with the Corporation "for cause" or the Corporation
shall terminate Optionee's Consulting Agreement or employment "for convenience",
all unvested options shall become vested as of the date of termination of the
Consulting Agreement or employment and all such options shall be exercisable
until the Expiration Date.
(d) The terms "for cause" and "for convenience" shall have the
same meanings as in the Consulting Agreement.
6. Nothing in this Agreement shall confer upon the Optionee any right
to continue rendering consulting services to or remain in the employ of the
Corporation or affect the right of the Corporation to terminate her consultancy
services or employment at any time.
7. (a) The Optionee may exercise the Option with respect to all or
any part of the shares then exercisable by giving the Corporation written notice
as provided in Section 11 hereof of such exercise. Such notice shall specify the
number of shares as to which the Option is being exercised and shall be preceded
or accompanied by payment in full in accordance with Section 3 hereof.
(b) Prior to or concurrently with delivery by the Corporation to
the Optionee of a certificate(s) representing such shares, the Optionee shall if
such shares are not currently or effectively registered under the Securities Act
of 1933, as amended (the "Act") and applicable state securities laws, give
reasonably satisfactory assurance in writing signed by the Optionee or her legal
representative, as the case may be, that such shares are being purchased for
investment and not with a view to the distribution thereof.
(c) As soon as practicable after receipt of the notice and
payment referred to in subparagraph (a) of this Section 7, the Corporation shall
cause to be delivered to the Optionee at the office of the Corporation at 10
West Forest Avenue, Englewood, New Jersey 07631 or such other place as may be
mutually acceptable to the Corporation and the Optionee, a certificate or
certificates for such shares; provided, however, that the time of such delivery
may be postponed by the Corporation for such period of time as may be required
for the Corporation, with reasonable diligence, to comply with applicable
registration requirements under the Act, the Securities Exchange Act of 1934, as
amended, and any requirements under any other law or regulation applicable to
the issuance or transfer of shares. Pursuant to the Consulting Agreement, within
six (6) months following the date thereof, the Corporation shall file a
Registration Statement on Form S-8 to register the shares of common stock
reserved for issuance under this Option.
8. If the total outstanding shares of Common Stock of the Corporation
shall be increased or decreased or changed into or exchanged for a different
number or kind of shares of stock or other securities of the Corporation or of
another corporation through reorganization, merger or consolidation,
recapitalization, stock split, split-up, combination or exchange of shares or
declaration of any dividends payable in stock, then the Board shall
proportionally adjust the number of shares (and the Exercise Price per share) or
kind of shares of stock or other securities of the Corporation or of another
corporation subject to the unexercised portion of this Option (to the nearest
possible full share).
9. Except as approved by the Board, this Option shall not be
transferable other than (i) by will or by the laws of descent and distribution,
(ii) pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act, or the Optionee or by a
permitted Transferee of the Optionee or (iii) to a Family Member (as defined
below). During the lifetime of the Optionee, this Option shall be exercisable
only by the Optionee or by a permitted transferee of the Optionee. In the event
of any attempt by the Optionee to transfer, assign, pledge, hypothecate or
otherwise dispose of the Option or of any right hereunder, except as approved by
the Board or as permitted herein, or in the event of the levy or any attachment,
execution or similar process upon the rights or interest hereby conferred, such
transfer shall be null and void and of no force or effect. For purposes of this
Agreement, "Family Member" includes any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing Consultant's
household (other than a tenant or employee), a trust in which these persons have
more than fifty percent of the beneficial interest, a foundation in which these
persons (or Consultant) control the management of assets, and any other entity
in which these persons (or Consultant) own more than fifty percent of the voting
interests.
10. Neither the Optionee, nor in the event of her death or otherwise,
any person entitled to exercise her rights, shall have any of the rights of a
shareholder with respect to the shares subject to the Option until share
certificates have been issued and registered in the name of the Optionee or her
estate, as the case may be.
11. Any notice to the Corporation provided for in the Option shall be
addressed to the Corporation at 10 West Forest Avenue, Englewood, New Jersey
07631, and any notice to the Optionee shall be addressed to her at her address
now on file with the Corporation, or to such other address as either party may
last have designated to the other by notice as provided herein. Any notice so
addressed shall be deemed to be given on the fourth business day after mailing,
by registered or certified mail, at a post office or branch post office within
the United States or upon receipt when delivered by hand, by overnight courier
or by confirmed facsimile.
12. This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey. If any one or more provisions of this
Agreement shall be found to be illegal or unenforceable in any respect, the
validity and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
signed by a duly authorized officer, and the Optionee has affixed her signature
hereto.
THE MNI GROUP INC.
By: __________________________________
----------------------------------
Optionee
